Growing competition as bike rental business hits the street

  • 2010-07-21
  • By Lelde Benke

RIGA - Riga is rather prone to certain business booms. When someone comes up with a successful idea for a shop, cafe or service, it fast becomes a trend that, sadly, doesn’t always flourish for long. Take-away coffee shops, art cafes and eco stores are currently opening and closing faster than it takes to realize a new one has appeared on the market. With older bike rental services expanding, new ones springing up citywide and the Baltics first bike sharing system unveiled in June, is this business destined to take a similar path?

Like Paris, Brussels and many other European cities, Riga now has its very own community bicycle program, BalticBike, that uses the German company Next Bike as its provider. A part of the airBaltic Corporation, BalticBike left people wondering why an airline would expand its business into bike rental. Janis Vanags, vice-president of Corporate Communications at airBaltic, explains that with a continued increase in passenger numbers, the management was interested in providing tourists with more to do in Riga.

Interestingly, airBaltic is part-owned by Baltic Aviation Systems, which also part-owns a taxi company in Riga that operates with a very similar lime green and blue ‘Baltic’ brand name to the airline and bike system.
The bike sharing system is also in operation in Jurmala, with the route between the seaside town and Riga a very popular choice to cycle down. Bikes cost 1 lats (1.42 euros) per hour to rent, or 8 lats per day. Lengthier rentals are also available.
To use a BalticBike you must first register online or by phone, then upon your arrival to the rental station you make a call to find out the key-code needed to unlock your bike. Some say this makes the system tourist-unfriendly, as using foreign mobile phones can be very pricey and Riga is not exactly telephone booth central.

Vanags was pleased to inform that the business is doing well, however, and that instead of the expected predominance of foreign customers, the system has currently registered about a 50/50 ratio between foreigners and Latvians.
Riga City Council (RCC) supports the project. Janis Andins, head of the bicycle traffic development, says airBaltic turned to them with the initiative and the council was only involved in helping choose locations for the bicycle stations. BalticBike has signed a rental agreement with the RCC traffic department to lease the plots on which they have set the stands up.

Andins notes that an international advertising agency had previously shown an interest in setting up a similar bike sharing system, to provide effective new advertising space, but decided at that point it was not an economically viable project.
BalticBike may be the only bike sharing system in Riga, but there are plenty of individual businesses offering rentals. To set up a bike rental service one does not require any special licenses from RCC. All one needs to do is register the company with the State Revenue Service. Rental prices vary from 0.80 lats to 2 lats an hour. Most companies ask for a deposit and ID to rent a bike.

Burusports and Gandrs are rental shops that have been around for a few years and are located slightly off the Riga center beaten track. While Burusports has been seeing a decrease in rentals over the years with more market competition appearing, Gandrs has observed an increase in both local and foreign customers. A shop representative mentioned that there had been talk of BalticBike potentially lowering the amount of rentals, but that effect was yet to be seen. The bikes rented at Gandrs and Burusports are not only for use in the city. Some people use them for longer trips outside Riga. Gandrs offers the option of renting a bike in Riga and dropping it off at their other location in Valmiera.

Sesks has recently opened a bike rental stand in one of Riga’s central-most parks, just down the street from the Freedom Monument. After a week’s work, business was low. The owners partially blame BalticBike as they have stands nearby and got first dibs on a plot at Bastejkalns that Sesks had been hoping for. They talk disapprovingly of the growing ‘Baltic’ brand monopoly. In the future Sesks hopes to attract customers with their lower than average prices and by offering a bike-minding service in Riga, where bike theft is rife.

ABC Grupa, a Jurmala-based company which is operating their first rental stall in Old Riga this summer, also complained business was not going too well, but blamed the heat. “In Riga it’s hard. Nobody rents bikes when it’s hot outside, whereas in Jurmala it’s the opposite,” said employee Andrievs Jansons. He believes it may be difficult for BalticBike to attract a local clientele as Latvians are not so open to computerized systems.

Luckily, the rental shops are yet to experience much damage done to their inventory or many unreturned bikes. Some bikes get given back with minor wear and tear, this only to be expected. The outdoor stalls tend to keep their bikes out during the night to avoid having to pay for storage space.

All those interviewed agree that Riga needs to see great improvements in bicycle infrastructure and road safety. Some said customers had complained about the lack of road signs and bike routes throughout the city. Vanags commended drivers for becoming more tolerant towards bike riders but said talks had been held with Riga’s deputy mayor to encourage the development of more bikeways. Andins assured that the 14km-long Riga Center-to-Bergi bike path is being built at the moment with money partly allocated by the EU. This will be the first commuter trail meant for everyday biking, rather than leisure trips. The RCC Traffic department has full information on planned bikeways on its Web site.

Competition is currently high, with some companies clearly doing better than others. With Riga not the bike-friendliest of cities, and Latvian weather often inappropriate for bike riding, it’s likely some businesses will continue to struggle to attract customers. Both BalticBike and other rental services  have their pros and cons. Whether BalticBike will win the fight, or individual rental shops will take over seems to depend on which rental system customers will prefer – one that requires Internet and phone registration, or the simple pay and go option.

Andins believes the public bike system will grow in the future. It would be a shame to see the rental businesses struggling for customers, as however inappropriate Riga’s current infrastructure may be, bikes certainly fit into the city’s historic landscape.